Coun Tilsley (Lib Dem, Sheldon) said: “Capita has taken the decision to stop the jobs going to Pune following our negotiations. We will now be supporting jobs in Birmingham.

“This follows a decision of the full council and decisive action by senior members of our Liberal Democrat and Conservative partnership.”

Capita is running the council’s Service Birmingham contract covering of services, including IT and call centre handling, until 2020.

Initially up to 100 skilled software development jobs were to be created at Capita’s facility in Pune, But this was capped at 55 last month and has now been cut altogether.

Coun Tilsley said a small number of staff had already been recruited in India but, due to a high turnover of staff, they could be found work on other Capita projects. Capita last year extended its deal to run the Service Birmingham contract until 2020, at a reduced cost to the taxpayer.

Permission to move jobs abroad was included in the small print of the deal.

At first it was claimed the jobs could not be filled locally due to a skills shortage but eventually it became clear that Capita needed to cut staffing costs.

When the plan was first revealed, Unite union official Peter Allenson said: “This is a major betrayal of the people of Birmingham and the loyal staff who serve this city.”

No comment was available from Capita yesterday but Service Birmingham said in May it was exploring how it could “utilise overseas expertise” in its city operation.